 "sensex, BSE")
The benchmark Sensex hit a new all-time high in intra-day trade on Wednesday, while the Nifty50 index fell short of the milestone by a whisker, propelled by sustained inflows from foreign portfolio investors (FPIs) and gains in index heavyweights.
The Sensex ended the session at 63,523 with a gain of 195 points, or 0.3 per cent, while the Nifty settled at 18,857, adding 40 points, or 0.2 per cent. These were the fresh closing highs for the benchmark indices. HDFC Bank, HDFC, and Reliance Industries accounted for most of the gains.
The Sensex also surpassed its previous life-time high of 63,583, made on December 1, 2022, by hitting 63,588 in intra-day trade on Wednesday. The Nifty, on the other hand, touched an intra-day high of 18,876, just 12 points short of its record high of 18,888. From this year’s lows in March, the Sensex and Nifty have gained more than 10 per cent, driven by robust FPI inflows.
Though FPIs were net sellers during the initial part of the year, they have become aggressive buyers since April. So far this year, they have been net buyers of over Rs 53,000 crore worth of domestic shares. On Wednesday, FPIs were net buyers to the tune of Rs 4,013 crore, while their domestic counterparts bought shares worth Rs 550 crore, according to provisional data from the exchanges. Strong macro indicators and optimistic growth outlook have made both domestic and foreign investors bullish on Indian equities, even as valuations have gone past historical levels.
“India’s equity market is driven largely by FPI flows, especially passive index flows. India benefits due to its strong macroeconomic outlook and corporate earnings growth, which is expected to record 14 per cent and 15 per cent growth in FY24 and FY25, respectively, ” said Pratik Gupta, CEO & co-head, Kotak Institutional Equities.
“This is quite attractive relative to other emerging markets, especially China,” Gupta added.
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Moreover, India is seen insulated from the global economic distress and the banking crisis in the West.
“Investor confidence has been significantly increased due to India’s remarkable economic growth, which is just beginning to unfold. We believe that the opportunities that the expanding Indian economy has to offer should eventually be reflected in the markets,” Puneet Maheshwari, director, Upstox, said.
Investors are cautiously optimistic about further gains amid a delayed monsoon and doubts about the trajectory of rate hikes. The lack of valuation comfort is also making them circumspect. The Sensex is trading at a trailing 12-month (TTM) price to earnings multiple of 24, as against the 10-year average of close to 18.
“Valuations are now somewhat expensive, which may cap further upside in the short term, but India’s long-term outlook is still very attractive,” said Gupta.
Shares of HDFC Bank rose 1.7 per cent and contributed the most to index gains, followed by HDFC, which gained 1.6 per cent. The market breadth was mixed with 1,822 stocks declining and 1,706 advancing. Utilities and power stocks gained the most, and their indices on the BSE rose 1.2 and 1.08 per cent, respectively.
